With 'green shoots' giving way to more definite signs of recovery in the global economy - most leading nations have already emerged from recession, with the UK being the latest – and with the global financial system back on an even keel (stock markets around the globe have recovered most of the ground lost after the collapse of Lehman Brothers in the Autumn of 2008 and credit markets have thawed out to a degree following the stabilisation of house prices in the West) now is perhaps a good time to bring to a close my survey of the sub-prime-induced credit crunch and the damage it wrought around the World. Internationally-co-ordinated action on the fiscal, monetary and financial fronts and a determination to resist protectionist tendencies appear to have successfully pulled back the World economy from the brink of depression and the financial system from near collapse. Of course, the real recovery is likely to be weak and protracted and unemployment, as a lagging indicator, is likely to continue its remorseless rise, albeit at a slower pace, for some time yet in most parts of the globe, but the worst does seem to be behind us. Wary of damaging the nascent recovery, policymakers are still developing their "exit strategies" – from extraordinary fiscal and monetary stimuli and state intervention in the financial system – rather than implementing them, with much discussion being devoted to how to reform financial regulation with a view to preventing a recurrence of a similar-style systemic collapse. These and other policy issues thus necessarily appear prominently in the analysis below. For now, without being complacent, our political masters can congratulate themselves for having spared their citizens from an even worse maelstrom, but much remains to be done if history is not to repeat itself and taxpayers are to be shielded from the consequences of financial "excess" in the future.

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This working paper is also available at: http://ideas.repec.org/p/lbo/lbowps/2010-06.html